Minutes of the Actions to the Fairway View Board Meeting 06/25/2020 Fairway Board of Directors 2020

The Chair Called Meeting to order August 24, 2020 at 1:00pm. The meeting was held virtually via zoho meeting.

1. Quorum Established The directors present were: Maureen Kirkpatrick, Chair; Thomas Fronk, Secretary; Linda Black, Treasurer; Tony Mirarchi, Director; Ernie Norton director Also in attendance as the management agent was John Caughell, C.O.R.E. Services

2. The Chair recognizes Linda Black, Treasurer, to present the 2021 budget recommended by the Finance Committee

The Treasurer presented the Finance Committee's recommended 2021 budget. Highlights of the report are that the Committee recommends a budget which addresses needed maintenance for the community. The administrative budget is planned to increase to address some potential requirements for management and legal services to get the amended and restated CC&Rs and bylaws completed. There is money to address necessary maintenance of the common and limited common structures and increases to address costs to maintain the landscaping. The Treasurer reports that the recommended budget is an increase of $115,000, or about 20% over 2020. The Board questioned the Treasurer as to budgeting process and justification for various budget categories. The Report is Accepted

3. The Board went into recess at 1:50pm until 2:15pm to effect a change in venue from online to in person at the club house, necessitated by interruptions in the Zoho on-line tool

4. Linda Black Moved to adopt the proposed 2021 budget for ratification by the owners at the annual meeting to be held October 22, 2020.

Motion seconded by Ernie Norton. Discussion opened, allowing proposals to amend.

5. Anthony Mirarchi Moved to amend the budget to reduce the planned reserve expenditure for ground covering from $116,000 to $16,000.

Motion seconded by Thomas Fronk. Discussion centered on financial burden on owners and the need to build and maintain reserves to meet future needs of the condominium property.

Minutes of the Actions to the Fairway View Board Meeting 06/25/2020 Fairway Board of Directors 2020

After discussion and deliberation, the motioned Fails

6. Thomas Fronk Moved to amend the planned reserve expenditure for ground covered from $116,000 to $16,000. Further moved to add $35,000 to the operating budget for ground covering.

Motion seconded by Ernie Norton. Discussion centered on financial burden on owners, the relative expense of living at Fairway contrasted with other area condo developments, the state of existing ground cover, relevance to the reserve study, and the continued need to build and maintain reserves to meet future needs.

After discussion and deliberation, the motioned Fails

7. Anthony Mirarchi Moved to amend the budget to reduce the reserve assessment from $235,000 to $140,000. Discussion centered on financial burden on owners

Motion seconded by Thomas Fronk After discussion and deliberation, the motioned Fails

8. Thomas Fronk Moved to amend the budget to reduce the reserve assessment from $235,000 to $200,000.

Motion seconded by Anthony Mirarchi After discussion and deliberation, the motioned Passes

9. Thomas Fronk Moved to amend the budget to reduce the cleaning of limited common elements decks and patios from $10,000 to $0

Motion seconded by Anthony Mirarchi. Discussion relevant to enforcement of declaration provisions related to decks and patios.

After discussion and deliberation, the motioned Fails

10. Thomas Fronk Moved to amend the budget to add in the amount of $20,000 for restoring the garden area to common use, available to all owners. . Discussion relevant to original taking of garden area out of common space and dedicating to exclusive use; likelihood of returning to common use; the cost of returning to common use

Motion seconded by Linda Black After discussion and deliberation, the motioned Passes

11. Chair called the question to adopt the proposed 2021 budget as amended.

Minutes of the Actions to the Fairway View Board Meeting 06/25/2020 Fairway Board of Directors 2020

After discussion and deliberation, the motioned Passes and the proposed budget for 2021, as amended, is adopted

12. The Meeting adjourned at 4:10pm Official attachments to these minutes:

2021 budget recommended by the Finance Committee to the Board of Directors

2021 proposed budget as amended and adopted by the Board

Attachments are available electronically and upon request to C.O.R.E. Services, LLC at fvca01@acclarit.com The minutes above have been prepared by John Caughell of C.O.R.E. Services, LLC and are true and correct to the best of my knowledge and belief. The minutes above have been read and accepted by Thomas Fronk, Secretary of the Board of Directors for Fairway View Condominium Association and are true and correct to the best of my knowledge and belief. The minutes were approved at the board meeting.

From: Treasurer Linda Black

To: The Board of Directors Fairway View Condominium Association

Date: August 23, 2020

Subject: Proposed 2021 Budget Recommended by the Finance Committee

I would first like to thank the Finance Committee Members

Brenda Norton John Payne Rob Fleskes Mac Stevens and Tony Mirarchi

For all of their time and effort on preparing this budget.

I will not pull punches. This budget is a dramatic increase from prior years. It is, in no small part, a reflection of the wisdom and expectations of the committee members. The committee evaluated the observations of management throughout 2020 and voted to act in the best interest of our community by funding those items which have not been addressed in the recent past.

The Finance Committee recommends the board adopt an operating budget of $371,060 and a reserve assessment of $235,000. This represents an average increase to our unit owners of $75 per month. Every dollar of this increase is for the good of our community.

The committee’s final recommendation increases our planned operating expenses by almost $80,000 over last year. There are many reasons for this, but the primary reason is that the Finance Committee did not want to raid the reserve fund. The owners had to swallow a $750,000 special assessment because our community has always seemed to find the reserve fund a convenient kitty to reach into when new projects are dreamed up. The committee wanted to ensure that our reserve fund remains healthy and is available for those future repairs that we planned for.

The Committee focused on ensuring that all necessary expenses are paid for. We recommended that we plan for higher management and legal fees. Management fees because the board has authorized a committee to create a scope of work which management will be responsible to. This is an excellent idea but could lead to an under-funded situation when management company’s present their proposals in line with those expectations. The Committee wanted to ensure that the Association allocated sufficient money to getting the management that the board believes is in our best interest. We also wanted to ensure that sufficient money was available to shepherd our amended and restated CC&R’s and Bylaws without, again, running the risk of dipping into our reserves.

The Committee, after being briefed by the chair’s of both the Maintenance and Landscaping Committees, also saw the merits of ensuring that we address much of the deferred maintenance. The Committee sees the benefit of power-washing our community’s decks and patios and our paved surfaces. The Committee wants to address the possible risk our sidewalks and walking surfaces represent. The recommended budget reflects those plans.

For our landscape, the Finance Committee listened to the Landscape Committee’s desire for our garden areas. We increased the landscaping expenses to ensure that there was now sufficient money to bring 23rd street back to life. And, while it is being treated as a reserve project, we are planning to place ground covering, in the form of bark dust, throughout the community garden space.

While the Finance Committee recognizes that bark dust is not a reserve component, it is essential to the community’s overall landscaping health. This is why the committee increased the reserve contribution by $25,000. This increase will help repay the reserve for use of reserve funds for non-reserve projects. We hope that future boards will honor this commitment by ensuring that the amount spent on bark dust is ultimately replaced back to the reserve over the next 4 years.

The Finance Committee appreciates that this proposed budget represents a 25% increase over last year. The increase represents a realistic appraisal of our costs to live in this wonderful community and meet the demands of an aging infrastructure and mature landscape. It doesn’t do everything today, but we believe this budget puts Fairway View Condo’s on strong financial footing for our future.

Fairway View Condominium AssociationFiscal Year 2021Planning Summary

2019 2020 Difference % change 2020 2021 Difference % changeOperating Assessment 286,760 291,275 4,515 1.57% 291,275 371,035 79,760 27.38%Reserve Assessment 184,322 200,000 15,678 8.51% 200,000 235,000 35,000 17.50%Total 471,082 491,275 20,193 4.29% 491,275 606,035 114,760 23.36%Ave/Unit/Month 307$ 320$ 13$ 4.29% 320$ 395$ 75$ 23.36%High Unit/Month 380.79 397.11 16$ 4.29% 397.11 489.88 93$ 23.36%Low Unit/Month 251.24 262.01 11$ 4.29% 262.01 323.22 61$ 23.36%

Investment Tranche ROI Amount Pre-Tax ROIImmediate 0.500% 425,000 2,125 Near Terms 0.800% 500,000 4,000 Mid-Term 1.5% - - Long-Term 4.00% - - Total Reserve Fund 0.66% 925,000 6,125 Less Deductions (4,500) Taxable 1,625 Tax Rate 35% (569) Net After Tax Return 0.60% 5,556

Reserve Assmt100% Funding 409,680 Recommended 235,000 57.36% FundedRequired Inc/(Dec) 174,680 % increase/(decrease) 74.33%

% Owner Change 28.82%

Reserve Fund

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Fairway View Condominium AssociationFiscal Year 2021Off Budget

Special Assessment Interest for Bank Loan and Members

OPERATING INCOME 2020 BUDGET 2021 BudgetInterest Income from Special Assessment 58,000 41,306

- - TOTAL OPERATING INCOME 58,000 41,306

EXPENSESBank Loan Interest Paid 58,000 38,190

Bad Debt on 2016 Special Assessment - - TOTAL EXPENSE 58,000$ 38,190$

Suplus to Reserve $0.00 3,116$

Target Special Assessment BalancesBank Loan 1,150,000$ 750,000$ Unpaid Owner Assessments 1,225,000 830,000

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Fairway View Condominium AssociationFiscal Year 2021Operating PlanEXPENSESRef Management 2019 2020 2021OE.1.1 Annual Management Fee 18,000 12,600 40,000 OE.1.2 Annual Accounting and Finance Fee 25,000 17,400 - OE.1.3 Operating Expenses 2,000 4,000 3,500 OE.1.4 Postage 1,500 1,500 OE.1.5 Supplies 1,000 1,000 OE.1.6 Communication/Technology 1,500 1,000 OE.1 Management 45000 34,000 43,500

Legal and ProfessionalOE.2.1 Reserve Study 1,000 1,000 1,200 OE.2.2 Annual Audit 5,000 5,000 4,500 OE.2.3 Legal Fees 13,500 8,000 13,000 OE.2.4 Document Review 7,000 12,000 OE.2.5 Litigation Issues 13,500 1,000 1,000

OE.2 Legal and Professional 19,500 14,000 18,700

UtilitiesOE.3.1 Trash 21,000 22,800 24,000 OE.3.2 Water 50,000 52,000 55,000 OE.3.3 Electricity 10,000 8,000 7,000 OE.3 Utilities 81,000 82,800 86,000

OE.4 Contingency 2,000 2,000 1,500 OE.5 Bad Debt 20,000 1,500 360 TOTAL EXPENSE 167,500 134,300 150,060

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Fairway View Condominium AssociationFiscal Year 2021Common Property Plan

2019 2020 Recurring Maint Renovation Refresh 2021Common Property Expenditures

Contractors/SubcontractorsApartment Buildings

CP.1.1 Roofing 9,000 62,500 2,500 10,000 12,500 CP.1.2 Unit Repairs due to leaks 1,000 1,000 1,000 CP.1.3 Siding - 500 500 CP.1.4 Gutters and downspouts cleaning 1,500 4,500 10,000 14,500 CP.1.5 Painting 4,000 - CP.1.6 Window Washing 5,000 2,000 - CP.1.7 Electrical 9,000 1,500 1,500 CP.1.8 Deck and Patio Cleaning (LCE Maintenance) 10,000 10,000 CP.1.9 Railings and spindles (LCE Replacement and Painting) 3,000 3,000 CP.1.10 Power Washing/ Cleaning 3,500 - 3,000 3,000 CP.1.11 Carpeting 3,500 22,000 6,000 6,000 CP.1.12 Locks 7,500 - CP.1.13 Handyman Services 2,000 - 5,000 5,000 CP.1.14 Contingency 10,000 7,000 2,000 2,000 CP.1 Total for Apartment Buildings 33,000 116,500 39,000 20,000 - 59,000

GaragesCP.2.1 Roofing 45,000 61,000 - CP.2.2 Siding/Doors 100,000 2,000 2,000 2,000 CP.2.3 Gutters and downspouts cleaning - 1,000 2,000 2,000 CP.2.4 Cleaning - 1,000 2,000 2,000 CP.2.5 Contingency - 2,500 1,000 - 1,000 CP.2 Total for Garages 145,000 67,500 7,000 - - 7,000 CP.3 Total for Contractors/Subcontractors 178,000 184,000 46,000 20,000 - 66,000

MaterialsCP.4.1 Lightbulbs/Fixtures - 1,000 1,000 1,000 CP.4.2 Batteries - CP.4.3 Smoke/fire alarms - CP.4.4 Roofing - CP.4.5 Contingency 1,000 1,000 1,000 1,000 CP.4 Total for Materials 1,000 2,000 2,000 - - 2,000 CP.5 Total for Apartment and Garage Structures 179,000 186,000 48,000 20,000 - 68,000

Parking, Pavements and SidewalksCP.6.1 Moss Treatment 3,000 5,000 5,000 CP.6.2 Sealing and Coating 20,000 - - CP.6.3 Sidwalks and walking surface maintenance 10,000 40,000 50,000 CP.6.4 Striping - - CP.6.5 Power Washing 1,700 5,000 8,000 8,000 CP.6.6 Garage Surrounds 37,000 - CP.6 Total for Parking, Paving and Sidwalks 21,700 45,000 23,000 40,000 - 63,000

LandscapingCP.7.1 Contract 45,000 50,000 52,000 52,000 CP.7.2 Other Landscaping Labor - 5,000 15,000 15,000 CP.7.3 Replantings - 2,000 10,000 10,000 CP.7.4 Spraying/Pruning 6,500 5,000 5,000 5,000 CP.7.5 Pest Control 6,200 3,000 4,000 4,000 CP.7.6 Tree Removal/Replace 4,000 5,000 5,000 - 5,000 CP.7.7 Irrigation 3,000 4,500 8,000 - 8,000 CP.7.8 Ground covering 11,000 - 116,000 116,000 CP.7.9 Contingency 2,000 3,000 3,000 2,000 5,000 CP.7 Total for Landscaping 66,700 88,500 102,000 118,000 - 220,000

CP.8 Contingency 10,000 - - - - - CP.9 Insurance 48,000 56,000 58,000 - - 58,000

Total Common Property Expenditures 325,400 375,500 231,000 178,000 - 409,000

CP.10 Carryforward available 10,000 Current year budget amount 221,000 Reserve Assessment 235,000$ Total Property Maintenance 456,000

Reserve Expenditures

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Fairway View Condominium AssociationFiscal Year 2021Improvements Budget

Condominium Improvement Projects

2020 BUDGET 2021 BudgetIB.1.1 - - IB.1.2 - -

- - - - - - - -

IB.1 Assessments for Improvements - -

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Fairway View Condominium AssociationFiscal Year 2021Operating Plan for Members

2019 2020 2021Operating Expenses- Budget

Management 25,200 36,500 43,500 Legal and Professional 7,500 14,000 18,700 Utilities 76,000 82,800 86,000 Contingency - - 1,500 Bad Debt - 1,500 360 Total for Apartment and Garage Structures 33,500 31,000 48,000 Total for Parking, Paving and Sidwalks 5,700 - 23,000 Total for Landscaping 59,200 67,000 102,000 Contingency - - - Insurance 83,285 56,000 58,000 Carryforward available - - (10,000)

Total Operating Expenses- Budget 290,385 288,800 371,060

Operating Fund Increase- Budget -$

Operating Income- BudgetREPAIR/MAINTENANCE REIMBURSMENT 3,600$ 3,600$ -$ INTEREST REVENUE-OPERATING 25 25 25 ASSOCIATION ASSESMENT-OPERATING 286,760 291,275 371,035

Total Operating Income- Budget 290,385 294,900 371,060

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Fairway View Condominium AssociationFiscal Year 2021Reserve Plan for Members

2019 2020 2021Reserve Fund Expenses- Budget

Total for Apartment and Garage Structures 470,000 145,000 20,000 Total for Parking, Paving and Sidwalks 20,000 20,000 40,000 Total for Landscaping 11,500 5,000 118,000 Contingency 10,000 -

Total Reserve Expenses- Budget 511,500 170,000 178,000

Reserve Fund Increase- Budget 427,922$ 38,600$ 68,556$

Reserve Income- BudgetASSOCIATION ASSESSMENT-RESERVE 934,322$ 200,000$ 235,000$ Interest Income 2,100 2,600 5,556 NEW BUYERS FEE-RESERVE ASSESSMENT 3,000 6,000 6,000

Total Reserve Income- Budget 939,422 208,600 246,556

* A reserve study that meets the requirements of RCW 64.90.550 has not been performed, but The per unit reserve funding deficit is based on the information in the prior year reserve study and the Association's projected reserve budget.

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